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At the launch of Kim DotCom's new and updated Megaupload, simply called Mega, a parody of the raid on DotCom's mansion, exactly a year ago, was featured. But given the copyright lobby's reaction to Kim's new baby, the same scenes could be played out again, for real, in the near future.

The new Mega plans to sidestep many of the legal issues that eventually led to the demise of Megaupload by introducing encryption into the mix. All user uploads and downloads are encrypted, meaning from Mega's (and DotCom's) point of view, everything that goes in and out of Mega's servers are just a jumble of random bits that doesn't mean anything. 

And that's the magic of Mega. By claiming, justifiably, that user files cannot be inspected for legality, Mega can say that they are totally unaware of the activities of their users, and so cannot be held responsible for the action of its users. At least theoretically. Files identified as infringing, after being downloaded and decrypted, may still fall foul of the DMCA, but I think one can assume the new Mega will be much more responsive when it comes to dealing with DMCA takedowns (or at the very least not leave any electronic records of conversation in which the key stakeholders discuss the need to be not as responsive as required).

Once uploaded, users can choose to provide a link to the encrypted file and then pass on a key privately to downloaders for them to decrypt the file, or they can generate a link that includes the decryption key and allow anyone to download and use the file (just like how the old Megaupload works). Theoretically, this allows the new Mega to be used to share files publicly, and secure privately.

While the encryption can protect Mega from lawsuits, users seeking to use the encryption to protect their file sharing may have to look elsewhere. Security experts have already sounded alarms about the type of encryption used, and how it may be circumvented. By making the Mega uploader and download as "thin" as possible (ie. without requiring additional plug-ins or add-ons to be installed, and relying solely the Javascript functions available to every web browser), some short-cuts in security has had to be taken.

Still, it's probably a bit more secure than using a password encrypted ZIP file and then emailing that password, insecurely, to people you want to share the file with.

The MPAA was, expectedly, not too pleased with this latest development. Citing the yet unproven fact that DotCom had "built his career and his fortune on stealing creative works", the MPAA said they were "skeptical" of the legality of DotCom's latest enterprise, given his "history of damaging the consumer experience by pushing stolen, illegitimate content into the marketplace".

Anti-piracy activists StopFileLockers, headed by adult industry figure Robert King, differs from the MPAA's stance that the new Mega merits further examination before any action is to be taken. StopFileLockers has already targeted resellers of Mega's premium accounts by asking PayPal to terminate their accounts. This is despite the accounts of Mega's current resellers, including the likes of well known domain name companies like Instra, EuroDNS and OnlyDomains.com, being predominantly used for non Mega related activities.

"Mega is no different to various other file locker services which have had various payment services canceled or suspended," King justifying his group's actions.

As anti-piracy groups regroup and rethink their strategy against Mega, users appears to be flocking to the new service, with Kim DotCom claiming that a million users have already signed up in the first 24 hours of the still beta service.